George Galloway, the British MP, was last night accused of lying by a US Congressional committee when he testified earlier this year that he had not received any United Nation food-for-oil allocations from the deposed Iraqi dictator Saddam Hussein.

In a report issued here, Minnesota Senator Norm Coleman and his colleagues on the Senate Subcommittee for Investigations claim to have evidence showing that Mr Galloway's political organisation and his wife received vouchers worth almost $600,000 (£338,000) from the then Iraqi government.

"We have what we call the smoking gun," said Mr Coleman, who will send the report to the US Department of Justice and the British authorities. The MP could face charges of perjury, making false statements and obstructing a Congressional investigation. Each charge carries a possible jail term of five years and a fine of $250,000.

But Mr Galloway again denied the allegations - as vehemently as he did last May in a bravura performance before the Subcommittee, when he accused Mr Coleman of mounting "the mother of all smokescreens" to divert attention from America's post-invasion difficulties, and launched a broadside against the Bush administration's entire policy in Iraq.

"I have not made a penny out of oil deals with Iraq, or indeed any other kind of deal," the MP said last night. "This ought to be dead, yet Norm Coleman parrots it once more from 3,000 miles away and protected by privilege." His spokesman later described the report as "derogatory and defamatory". The report claims that between 1999 and 2003 Mr Galloway personally solicited and was granted vouchers for 23 million barrels of oil, at below the market price. These vouchers could then be resold at a profit. It also alleges that money was channelled to Amineh Abu-Zayyad, the MP's wife, and to the Mariam Appeal, an organisation set up by Mr Galloway to help a young Iraqi girl with leukemia.

Mr Coleman maintains that his evidence is based on bank records, as well as interviews with Tariq Aziz, the former foreign minister and deputy prime minister under Saddam, and with the former vice-president Taha Yasin Ramadan.

Mr Galloway's appearance before the panel, the Minnesota senator said, was "a lot of bombast". The MP was "anything but straight with the committee; he was anything but straight with the American people".

Nonetheless the testimony provided some rare parliamentary-style theatre on Capitol Hill. It turned Mr Galloway into a minor cult hero in the US's growing anti-war movement, and provided the platform for a book, and a speaking tour here last month entitled "Mr Galloway goes to Washington".

The oil-for-food scandal has also cemented Mr Coleman's reputation here as a leading foe of the UN. Earlier this year he called for the resignation of Kofi Annan, the UN secretary general, for his lax supervision of the scheme.

London, Oct. 26(Guardian News Service): George Galloway is considering taking his fight with Senator Norm Coleman to the Republican's heartland by booking a venue in Minnesota and challenginghim to a debate.

The senate investigation claimed Galloway, MP for Bethnal Green and Bow, was granted eight oil allocations totalling 23 million barrels between 1999 and 2003. Galloway said he had never received a penny in oil money.

Ron McKay, Galloway's assistant, said that a hall could be booked for Minnesota possibly for as early as next week. The two could fly to the US and challenge Senator Coleman to turn up for a debate.

Galloway said that the debate was one of a number of options and a final decision had not been taken. ``We want to take the fight to the enemy,'' he said. He expressed little confidence that Coleman would agree to such a debate.

Galloway surprised Coleman in May by flying to Washington to confront him directly in the senate over the oil allegations. Last month he flew to New York to debate Iraq with the writer Christopher Hitchens.

Galloway described the senate's report as ``politically motivated''.

He also repeated his challenge to Coleman to make his allegations outside the protection of the senate, to accuse him of perjury and let a court decide.

``I have no confidence that Coleman will charge me. That would require [Tariq] Aziz [the former Iraqi deputy prime minister being held in jail in Iraq and one of the senate committee's alleged sources] and others appearing in court.'' He said the senator would be ``terrified of that''.

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